Scotsman owner Johnston heads for administration

Johnston Press — the debt-laden owner of The Scotsman, the i newspaper, the Yorkshire Post and about 200 local newspapers and websites — said late on Friday it intends to place itself into administration.

Johnston Press announced “the end of the formal sale process, an intention to file for administration and effect a sale to its bondholders.”

A statement from Johnston Press said: “Following considerable interest in the formal sale process, the board has concluded that none of the offers the company has received deliver sufficient value and has ended the formal sale process.

“As a result, the board has concluded that there is no value in the ordinary shares of the company.

“The board has resolved that the best remaining option is for the company and its principal subsidiaries to be placed into administration.

“It is envisaged that, subject to administration orders being made, the group’s businesses and assets will then be sold to a newly-incorporated group of companies controlled by the holders of the bonds.

“The defined benefit pension scheme will not transfer.

“The Pension Protection Fund will be notified and the PPF, with the assistance of the trustees of the scheme, will then assess whether the scheme needs to enter the PPF.”

London’s Daily Telegraph newspaper has reported that Johnston is due to apply for court approval to appoint administrators and execute a pre-packaged sale to a new holding company controlled by the New York hedge fund GoldenTree Asset Management.

Johnston Press chief executive David King said in a message to staff the company’s operations would “continue uninterrupted” and that they should “turn up for work as normal.”

King added: “This has not been an easy decision for the board.

“However, having explored a range of other options, this is the best available course of action and it is one that offers a chance for a brighter future for our business.

“As I have stressed on several occasions, our business is profitable with good margins. Our debt has constrained us.”